With the help of Standard Chartered Bank as a middleman, the Bangladesh Bank (BB) has granted IPDC Finance Ltd. conditional permission to get a long-term loan of €15 million from the German company Deutsche Infestations-und Entwicklungsgesellschaft (DEG).
IPDC would have to renegotiate the terms of the foreign currency loan in order to comply with the restrictions.
Mominul Islam, managing director and chief executive officer (CEO) of IPDC Finance, stated that IPDC was in discussions to receive the financing at a variable interest rate that would be based on the benchmark London interbank rate. The central bank has, however, requested that the rate not exceed 4.2pc, which is less than the agreed-upon figure.
According to the CEO, IPDC will use the loan amount for SMEs, women’s empowerment, and green financing if the renegotiation gets fruitful.
Moreover, the Bangladesh Bank has mandated that the maximum interest rate on loans issued by IPDC not exceed 10pc. Within 60 days of approval, IPDC must receive the money from DEG; the loan is intended to have a six-year tenure. If the renegotiation fails, the loan may not be granted because of the central bank’s requirement that the interest rate is lowered.
